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Ruchir Sharma: The Emerging-Market Comedown

Most developing economies grow rapidly only when commodity prices are rising.

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Ruchir Sharma

Jan. 21, 2014 7:37 p.m. ET

The beguiling idea of "convergence" still lives. But it shouldn't. The basic notion of convergence is that incomes in poor nations will rapidly catch up—or converge—with those in rich nations. This argument gained a popular following over the past decade when emerging economies were growing three times faster than the world's leading economy, the U.S. After the average annual GDP growth rate in emerging nations peaked at 8.7% in 2007, it tumbled to roughly 4% in 2013. Yet to many observers, that pace still appears fast enough for these countries to catch up to the U.S., now growing at an annual pace of just...